1. Conceptual Foundations
7th and 8th

2. Learning Outcomes
Students should be able to summarize conceptual foundations needed in business research

3. Outlines The importance of conceptual foundation in business research
The interdependence between conceptual foundation and the research’s purposes
Using previous findings and scientific reading as conceptual foundations
Conceptual foundations and variables of the research

4. FROM CHAPTER 5
Copyright © 2003 John Wiley & Sons, Inc. Sekaran/RESEARCH 4E

5. The Importance of Conceptual Foundations
After formulating research problem, the next step in research process is collecting theories, concepts, and previous research that can be generalized as conceptual foundations for future research
The researchers are expected to have rigid foundation of the research, not just trial-error action
Thus, conceptual foundation is one of scientific way in gathering information about the theories as well as the issues

6. The Interdependence between Conceptual Foundation and Research Purposes
Sharpen and deepen the scope of the research’s variable
The basis for formulating hypothesis and research design
The basis for discussing the results of the study, giving advice for problem-solving situation

7. The Use of Previous Finding and Scientific Reading
Technically, the results of the study which is relevant with what future research to be done can be depicted from: the problem, timing, location, sample of the research, research method, analysis method and conclusion.

8. Conceptual Foundations and Research Variables
The conceptual foundation characterized that the study is scientific
Theories, concepts and generalization of previous researches can be supporting the future research
Conceptual foundation at least consists of the explanation of the variables
There is a need for the existence of conceptual foundation, so that the research has a rigid basis not just trial error
Through definitions from many references, the scope and prediction of the connectedness between research variables becoming more clearly and precisely
Research variables that can not be explained well by the researcher showed that the researcher does not understand the theory used in his own research

9. Variables
Variable is anything that can take on differing or varying values.
The values can differ at various times for the same object or person, or at the same time for different objects or person.
Examples:
Production units
Absenteeism
Motivation

10. Production Units
One worker in the manufacturing department may produce one widget per minute, a second might produce two per minute, a third might produce five per minute.
It is also possible that the same member could produce one widget the first minute, and five the next minute.
In both cases, the number of widgets produced has taken on different values, and is therefore a variable.

11. Absenteeism
Today, three members in the sales department may be absent, tomorrow six members may not show up for work; the day after, there may be no one absent.
The value can thus theoretically range from “zero” to “all” being absent, on the absenteeism variable.

12. Motivation
The levels of motivation of members to learn in the class or in a work team might take on varying values ranging from “very low” to “very high”.
An individual’s motivation to learn from different classes or in different teams might also take on differing values.
The factor called motivation has to be reduced from its level of abstraction and operationalized in a way that it become measurable.

13. Types of Variables The dependent variable (criterion variable)
The independent variable (predictor variable)
The moderating variable
The intervening variable

14. Dependent Variable
The variable of primary interest to the researcher (finding what variables influence it), it is possible to find answers or solutions to the problem.
Example:
A vice president is concerned that the employees are not loyal to the organization, and in fact seem to switch their loyalty to other institutions. The dependent variable in this case would be organizational loyalty

15. Independent Variable
One that influences the dependent variable in either a positive or negative way.
Example:
Research studies indicate that successful new product development has an influence on the stock market price of the company. That is the more successful the new product turns out to be, the higher will be the stock market price of the firm. Therefore, the success of the new product is the independent variable, and stock market price is the dependent variable

17. Moderating Variable
One that has a strong contingent effect on the independent variable—dependent variable relationship
Example:
It has been found that there is a relationship between the availability of Reference Manuals that manufacturing employees have access to, and the number of product rejects.

18. However, only those who have interest and urge to refer to the manual every time a new process is adopted will produce flawless products. Others who do not will continue to produce defective products.

19. Intervening Variable
One that surfaces between the time the independent variable start operating to influence the dependent variable and the time their impact is felt on it.
Example:
Where workforce diversity (IV) influences organizational effectiveness (DV), the intervening variable that surfaces as a function of the diversity in the workforce is creative synergy, which results from a multiethnic, multiracial, and multinational workforce interacting and bringing together their multifaceted expertise in problem solving.

21. The Relationship among the independent, intervening, moderating and dependent variable

22. From the previous figure, it would be interesting to see how the inclusion of the managerial expertise as moderating variable would change the model or affect the relationship.
Managerial expertise moderates the relationship between workforce diversity and creative synergy.

23. What would be the dependent variable in this case?
A manager is concerned that the sales of a new product introduced after its test market do not meet with his expectations.
A basic researcher is interested in investigating the debt-to-equity ratio of manufacturing companies in Tangerang.
An applied researcher wants to increase the performance of organizational members in a particular bank.
A marketing manager wonders why the recent advertisement strategy does not work.

24. Label the variables below…….
Cross cultural research indicates that managerial values govern the power distance between superiors and subordinates (power distance means egalitarian interactions between the boss and the employee, versus the high power superior in limited interaction with the low power subordinate).
A manager believes that good supervision and training would increase the production level of the workers.
A consultant is of the opinion that much benefit would accrue by buying and selling at the appropriate times in a financial environment where the stocks are volatile.